Recently a friend asked me to explain to him in simple terms how the Greek financial crisis came to existence. I used the following analogy.
Let's say you (the Greek government) are married and the marriage is not so good. Both you and your wife (the Greek public) work in simple jobs and can't afford any luxuries. Now your wife starts to hint that if things don't improve she may leave you for another man (the opposition party in Greece). You get a little scared by that thought and think that if you get a loan from a friend (German/French banks) then you could make your wife much happier.
Your friend, a local businessman, agrees to lend you the money for two years in hope that you buy jewelry (German/French products) for your wife from his shop. Then with the lent money in hand you can take your wife to expensive restaurants (Greeks going overseas), buy her jewelry and now she seems to be much happier with you. Actually she is so happy that she decides to quit her job (early Greek retirement) and proposes that instead of working 8 hours in the office she would do housework at home 4 hours a day (Greek government jobs). Now everybody is really happy and the future looks bright.
But after two years your friend asks for the loan to be repaid. You think that you could borrow the money from someone else, repay your loan to your friend and continue to have the good life. But for some reason nobody (the financial markets) is willing to lend you. They look at your situation, the fact that your wife doesn't work and think that it's too risky to lend you at any interest rate because you may pay the interest but most likely will never be able to pay back the loan amount. So you end up going to the local loan shark (the IMF) and he agrees to help you under certain conditions: You have to sell your house and move into a small apartment, your wife needs to go back to work, you have to sell the expensive jewelry you bought for whatever price you can get for it and you have to stop all luxurious activities until the loan is paid back. Now your wife is really unhappy and she makes a horrible scene (Greek riots).
So you have two choices. Either convince your wife to agree with the suggested measures and get out of the burden of debt with hard work and austerity or just not pay your friend back (default on Greek government debt). You think that the former is a better way to do it because you don't want to lose a good friend that possibly can loan you in the future. It would also be more convenient in the short term than going through a lengthy process of litigation. Plus it's more likely that your wife doesn't leave you. Also your friend puts a lot of pressure on you to accept the loan shark's terms otherwise his household would suffer (French/German elections). Of course he tells you that it's for your own good.
So whose fault was it that this situation came to this? Probably everyone's. You should not have taken the loan, your friend should not have lent the money to someone in your situation and your wife should not have put the pressure on you to try to live beyond your means.
